The Federal Government has rejected calls to wind down the coal industry, after a Climate Commission report suggested the majority of the world's coal must be left unburned.

The report says global carbon dioxide emissions cannot exceed 600 billion tonnes between now and 2050 if the climate is to stay within 2 degrees Celsius of pre-industrial levels.

It says that emissions "budget" is being used far too quickly and that global emissions need to trend downward by the end of the decade to keep temperatures at a manageable level.

Co-author of the report Professor Lesley Hughes says there will be catastrophic consequences for the environment if action is not taken.

"In order to achieve that goal of stabilising the climate at 2 degrees or less, we simply have to leave about 80 per cent of the world's fossil fuel reserves in the ground," she said.

"We cannot afford to burn them and still have a stable and safe climate."

Minister says Australian coal helping millions out of poverty

Federal Resources Minister Gary Gray says he acknowledges the need for clean energy, but says coal is still vital to the global economy.

He says while Australia can turn to natural gas, it should still export its coal reserves.

"There is no solution to global baseload energy generation that does not figure a big contribution by coal," he said.

"It's also important for us to have investments in smart coal technologies to ensure that we can capture CO2 in the flue."

Mr Gray says Australia's coal is helping nations like India and China bring hundreds of millions of people out of poverty.

"We do have to accept that in a growing region there are still countries that need these resources in order to draw hundreds of millions of people out of poverty," he said.

"That's why we also invest in the technologies of the future, not just the minerals processes of the future."

Coalition says real change depends on global action

Opposition environment spokesman Greg Hunt also ruled out closing the coal industry in a bid to reduce carbon emissions.

Mr Hunt says the Coalition supports Australia's emissions reduction target but that real change will not happen until there is a global agreement.

"The key for the world is a global agreement between the big G4 of China and the United States, India and the EU," he said.

Greens leader Christine Milne says the Government and the Coalition are showing they do not accept the climate change science.

"You either [accept] climate science and you understand those coal reserves have to stay in the ground or, if you're going to back those coal reserves and the ports in Queensland, then you don't believe the climate science," she said."